oem-config-firstboot needs x, but no x in server installs

I installed ubuntu 6.06.1 server version from CD, (into a VMware machine)

I chose expert mode, and OEM mode.

At first boot, I could log in as oem:<password from setup> and all was good. I could customize things, and do whatever I needed to.

When all was working, I issued "sudo oem-config-prepare" as told at first boot.

Rebooting the system at that point caused no end of troubles.

The system tries to change res a few times (vmware window resizes), and fails 5 times, each with the same traceback.

Traceback (most recent call last):
   File "/usr/sbin/oem-config-dm", line 58 in ?
      sys.exit(dm.run(*sysv.argv[3:]))
   File "/usr/sbin/oem-config-dm", line 44 in run
      os.kill(server.pid, signal.SIGTERM)
OSError: [Errno 3] No such process
>>>>> repeated 5 times <<<<<<<
ERROR: The OEM installer failed. Your system may not be usable yet. Please report this as a bug to your vendor (presumably in this case, that means myself)

It then asks me to create a user normally, and warns me that I'm in single user mode, root shell.

The user that you create here is NOT added to the sudoers list, so if you simply follow the instructions here, and reboot, you're screwed.

I take it oem mode is simply not designed for text only systems, (though it seems like a wonderful feature for people building vmware appliances) and as such could it either be removed from the menu, or fixed to work in text mode?